James Moore: One-trick ponies of the mining world face a new and less profitable future

Outlook "Companies like Lonmin have already cut capital expenditure and rising wages may force them to look also at closing higher-cost shafts… Unless we see a sustained recovery of platinum prices more jobs will be lost."

So said Alison Turner, a mining analyst with Panmure Gordon, to a South African newspaper, from her comfortable, air-conditioned office in the City of London.

Well, those wages are finally firmly on the rise. Lonmin has agreed to pay increases of up to 22 per cent for its miners at Marikana, plus a "signing bonus" of up to 2000 rand. That's about £150, and so the City can hardly complain about golden hellos, even if, as in this case, it's more like a "golden hello again".

The price of getting the money could not have been higher for the miners. At least 36 miners will no longer have the attractive opportunity of descending into the bowels of the earth for less than £1,000 a month, a sum which wouldn't quite pay for the business class air fares demanded by mining executives when they choose to visit their operations.

South Africa, as a country, has the world's greatest disparity of income between those at the top and those at the bottom of its society, after Brazil. But the mining industry could teach it a thing or two with its multi-millionaire executives and traders, with its hangers on (like Ms Turner) who bring in six figures or better, with its miners who risk their lives for a meal or two, if they're lucky.

Executives get paid the market rate for the job, right-wing economists tell us, while dismissing as naive critics of a situation that looks, to put it mildly, grotesque.

But what has sparked the current problems, now spreading beyond Lonmin's gates to other operators who pay their employees similarly poorly, is that the platinum miners have realised that they have a certain amount of power – not sufficient to dictate the "market rate" like executives do when they have quiet words in the ears of their remuneration committees, but power all the same.

The stuff they pull out of the ground isn't found in many places and there are quite a few one-trick ponies among the companies that mine it. As a result the miners have bargaining chips to play with and they are making use of them, to the chagrin of mining executives, politicians and even some union bosses.

That means the return on equity enjoyed by Lonmin and its competitors will be less stellar than had been expected and its (acting) chief executive might have to struggle along on a few hundred thousand less than he might like. It also means we will have to pay a pound or two extra for the gizmos that rely on platinum. So be it. Mining is a difficult, dirty and dangerous job. The sad fact is that others who handle less geographically concentrated commodities that help make traders, analysts and executives rich, aren't in such a fortunate position.